Legislative Updates

An Update on Federal Issues: ATF and Contraband Cigarettes

CDA has become aware that the Bureau of Alcohol, Tobacco and Firearms (ATF) has begun to enforce more aggressively a decades old law known as the Trafficking in Contraband Cigarettes and Smokeless Tobacco Act. This can affect all distributors, but especially those which have a cash and carry business operated from their warehouses, branches, offices, or stores.

With regard to any sale, shipment, or distribution of over 10,000 cigarettes (50 cartons) or over 500 single-unit consumer-sized cans or packages of smokeless tobacco in a single transaction at a distributor’s place of business, the distributor must obtain (and keep) the following information from the purchaser:

the name, address, destination (including street address), vehicle license number, driver’s license number, signature of the person receiving such cigarettes, and the name of the purchaser;

a declaration of the specific purpose of the receipt (personal use, resale, or delivery to another); and

a declaration of the name and address of the recipient’s principal in all cases when the recipient is acting as an agent.

This rule does not apply to duly licensed distributors who deliver to the recipient’s place of business stamped cigarettes or smokeless tobacco on which applicable taxes have been paid. This rule requiring license numbers and driver’s licenses applies when cigarettes or smokeless tobacco is bought at the distributor’s place of business.

CDA advises that ATF has advised that its enforcement of the Cigarette and Smokeless Tobacco Contraband Act is expected to expand throughout the entire United States. ATF stated that to date, its activities have been primarily centered around Virginia and North Carolina on criminal oriented activities.

ATF to date is not advising distributors in advance when it may arrive at a distributor’s business to review the records containing the information set out here. CDA will continue to monitor the situation and will advocate—-at a minimum—that the ATF advise in advance when it may visit a distributor’s place of business.

The California Air Resources Board (ARB) recommends that owners of transport refrigeration units (TRU or reefer) and TRU generator sets should have already began their planning strategies and budget approval processes to ensure model year

2007 TRU and TRU gen set engines are in compliance with the TRU Regulation by the end of 2014.

The TRU Regulation allows compliance extensions if compliance with the TRU Regulation’s in-use standards is delayed until after the December 31, 2014 deadline due to delays in delivery or installation. But, to qualify for these extensions, certain conditions must be met:

1. The TRU or TRU generator set must be registered in ARB’s Equipment Registration (ARBER) system,

2. Purchase orders must be placed before the purchase order deadline, and

3. An extension application must be submitted before December 31, 2014.

The TRU Regulation has the following purchase order deadlines:

* For reefer trailers, TRU or TRU generator set replacements, and new replacement engines: August 31st (four months ahead of the compliance deadline); and

For model year 2007 TRU engines/units, owners must make a good-faith effort to comply by the end of 2014. If in-use compliance cannot be achieved by December 31, 2014, due to delays in delivery or installation, owners may apply for a compliance extension. The compliance extension application, with attached supporting documentation, must be received at ARB by December 31, 2014.

Avoid penalties due to compliance after the December 31, 2014 compliance deadline due manufacturer or installer delays. Order reefer trailers, TRUs, TRU generator sets, and new replacement engines by August 31, 2014. Order verified diesel particulate filters by October 31, 2014.

All model year 2006 and older engines (or units manufactured in 2006 or earlier) should be in compliance now. Please note that trailer manufacture year and in-service dates are not used to determine compliance dates. Noncompliant model year 2006 and older TRU/TRU genset engines/units must not be operated in California unless they are brought into compliance immediately.

If you have questions about in-use performance standard compliance, registration in ARBER, or in-use compliance extensions, please call the TRU Help Line at 1-888-878-2826 or call 1-916-327-8737.

Background: TRUs are refrigeration systems powered by integral diesel internal combustion engines designed to control the environment of temperature-sensitive products that are transported in trucks, trailers, shipping containers, and railcars. The emissions from these units are a source of unhealthful air pollutants including particulate matter, toxic air contaminants, nitrogen oxides, carbon monoxide, and hydrocarbons, that all pose a potential threat to both public health and the environment. These units often congregate in large numbers at California distribution centers, grocery stores, and other facilities where they run for extended periods of time to ensure their perishable contents remain cold or frozen. These distribution and loading facilities are often in close proximity to schools, hospitals, and residential neighborhoods. In 2004, the TRU Airborne Toxic Control Measure (ATCM) was adopted by the Board to reduce diesel particulate matter emissions from TRUs and TRU gen set engines. Amendments were adopted by the Board in November 2010 and October 2011.